04/26/2012 10:31 EDT | Updated 06/26/2012 05:12 EDT

Ask a Realtor: Should I Buy a Condo or Co-op?


"Ask a Realtor" appears Thursdays. Have a real estate question for Susanne? Please email her at, and she will publish and answer the questions of most general interest.

Is it better to invest in a condo or a co-op?

Perhaps you're thinking of downsizing since you don't need the four-bedroom house anymore. Sick of shoveling the snow? Want more time to travel? A hassle-free condo lifestyle might be what you're looking for. Condos and co-ops are both good alternatives to owning a house, but there are pros and cons to both.

Condominium apartments

A Condominium apartment (condo) is the most common type of apartment ownership and is governed by the Condominium Act, a piece of legislation brought into effect in the 1960s and updated in 1998. Each unit is separately owned and unit owners share ownership of common areas such as hallways, roofs, exteriors and amenities such as the underground parking, swimming pool, gym etc. After the building is registered, a condo corporation is formed and its executive oversees the management of the building and the annual budget. As an owner you pay a monthly maintenance fee for common element expenses, building insurance, the reserve fund, usually parking and sometimes a concierge. Heat and hydro are usually separate but heat is often included. Taxes are not included. You can rent or sell the unit without restriction. Most lenders arrange mortgages for this type of property.

Co-ownership apartments

A Co-ownership apartment (co-op) represents a system in which registered owners have an undivided percentage interest in the whole property. Each owner has shared rights with respect to common elements of the property as well as exclusive rights to a particular suite (a parking spot and locker are included in most cases). Maintenance fees are usually as per condominiums. Taxes are included. There is a board of owners that oversees the maintenance and the annual budget. The board also approves potential buyers but this is usually a rubber stamp process. Financing is limited and the rate is usually higher. There is usually a restriction regarding renting these units.

Are they both a good investment?

  • Condos are usually a better investment as they are easier to sell and buyers don't have the same restrictions as they would with buying a co-op.

  • Co-op owners are also usually older, coming from a house, and paying cash for their co-op. Because of the restrictions with co-ops, these units are also somewhat larger for the money than condos. So if you are retired for example and want an apartment that is a reasonable size, at a reasonable price and you don't need a mortgage, a co-op might be a great alternative for you.

  • If you plan on moving again in a couple of years and investment growth is very important to you, then a large condo is perhaps the way to go. This holds true for a large co-op apartment in a premium building as well.